The impact of Marmara earthquakes on regional economic development: a Difference in Differences analysis using nightlights

This study provides empirical evidence on the impact of 1999 Marmara earthquakes on regional economic development. It employs nighttime light data as a proxy for economy activity which is an innovative tool to tackle with the limitations of traditional indicators such as GDP. Statistical analysis is based on the application of two-way fixed effects model within Difference in Differences (DiD) framework which was further strengthened with an event study analysis developed by Callaway & Sant’Anna (2021). According to the results, there is a considerable loss of economic activity in districts severely affected by the earthquakes. Post disaster aid creates a revival in regional economic activity which does not last long. The analysis provides valuable lessons for policymakers in the context of the heavy economic burden arose from deficiencies in urban planning and infrastructure inspections, the importance of post disaster relief efforts and how they create a boom in economy and the necessity of making robust economic policies that maintain sustainable economic growth after the disaster.